Wall St suffers worst drop since June

US stocks slumped today, with the S&P 500 suffering its worst drop since June, after weaker-than-expected data on the factory sector in the world's largest economy provided investors with the latest reason to move away from riskier assets.

US manufacturing grew at a slower pace in January as new order growth plunged by the most in 33 years, while spending on construction projects barely rose in December.

The Dow Jones industrial average closed down 326.05 points, or 2.08 percent, at 15,372.8. The S&P 500 lost 40.7 points, or 2.28 percent, to 1,741.89 and the Nasdaq Composite dropped 106.919 points, or 2.61 percent, to 3,996.958.

European shares fell to a one-and-a-half month closing low, knocked back by data that showed China's economy losing momentum and by growing worries about the affect on companies of turmoil in emerging markets.

The pan-European FTSEurofirst 300 index, which in January had its first monthly loss since August, ended down 1.4 percent at 1,272.95 points - its lowest close since finishing at 1,259.06 points on Dec. 18 last year. The euro zone's blue-chip Euro STOXX 50 index also fell, by 1.7 percent to 2,963.96 points.

Japan's Nikkei share average fell to a fresh 2-1/2 month low, extending its declines into a third day with little sign that emerging market woes have abated, and upcoming US jobs data keeping investors risk-averse.

The Nikkei slid 2 percent to 14,619.13, its lowest closing level since Nov. 13. The benchmark dropped below its 26-week moving average of 14,833.06.